“Bearing in mind that anything is possible, the most likely
scenario we see is that the Department of Labor (DOL) fiduciary rule will move
forward on its current schedule with implementation on April 10, 2017,”
says Duane Thompson, senior policy analyst
at fi360.

Joining a chorus of firms to share preliminary commentary with
PLANADVISER, Thompson predicts that the Republican President-elect Donald Trump
“may not even have a DOL secretary, or assistant secretary that runs the
Employee Benefits Security Administration, nominated or approved by the Senate
by April 10.”

Thompson further suggests it is “certainly possible” that
when the new DOL secretary comes in, since the Best Interest Contract Exemption
(BICE) and Principal Transaction requirements don’t take full effect until
January 1, 2018, “this compliance deadline could be extended out.” In
other words, it appears at least preliminary that there may be some relief
coming on the strict contract and related recordkeeping requirements in the
rulemaking. However this may not actually be viewed as a positive by all providers, as the election clearly puts the growing number of brokerage and advisory firms that have already made significant changes to compensation structures in a difficult spot. For example, Merrill Lynch just last week moved to completely halt commission-based brokerage sales of mutual funds to retirement account clients. Beyond this, literally dozens of providers, if not more,
have in the last several years rolled out new tools and solutions specifically aimed at helping brokers
and advisers comply with the tenants of the rulemaking.

According to Thompson, the “option of falling back on an
expedited legislative review process” also appears highly unlikely.

“The Congressional Review Act says after a final regulation
is published, Congress has 60 ­legislative days to act on a
disapproval motion. Since Congress has already acted with a resolution to
overturn the rule, and failed
to secure passage earlier this year, due to a presidential veto, the CRA
doesn’t appear to be a viable option for a Trump White House and the 115th
Congress,” Thompson says. “Of course, the new Congress could start all over
again and go through the regular legislative process by introducing a bill and
going through an often time-consuming legislative process in both houses.
That’s certainly possible, except that it runs the risk of having Senate
Democrats blocking the measure.”

Thompson warns there is also an outstanding question of “whether
industry would even lobby to overturn the rule since they would have to go back
to square one and reconfigure their compliance systems and product lineups this
far into the implementation process.”

“In addition, we haven’t heard a specific position from
President-elect Trump on the DOL rule, although one of his campaign aides said
it should be overturned,” he concludes. “It is certainly possible that a Trump
Administration could look at ways to administratively broaden the safe harbors
for conflicted advice or avoiding fiduciary status, but it would be extremely
difficult to roll back the rule in its entirety.”

NEXT: Broader
commentary is equally uncertain

Commentary shared with PLANADVISER regarding the broader
impact of the pending Trump presidency was equally uncertain, but investment
firms in particular are urging Americans to respond with poise and a long-term perspective.

“We expect that market volatility should continue due to increased
political uncertainty,” Kreuzkamp adds. “Trump’s unpredictability and his lack
of political experience are more than enough reason to approach the coming
months with some caution. Media coverage is likely to remain
negative. Even if he were to follow through on only half of his vigorous
campaign promises, this could cause considerable unrest.”

Despite that, Kreuzkamp stresses that investors should not lose
their nerve.

“Let us not forget that the key constant in Trump’s election
campaign was to continually surprise the public,” he explains. “It is entirely
possible that after his election, he could in fact surprise markets on the
positive side. Our hopes are based on Trump’s pragmatism, his ability to adapt
and his generally limited political allegiance. There is a chance that he could
allow the political veterans in Congress to pass a fairly classical Republican
campaign program.”

Vanguard provided the firm’s perspective on the potential
impact of President-elect Trump’s victory on the economy and the markets via a statement
from Ann Combs, head of Vanguard Government Relations—and from and Roger
Aliaga-Díaz, Vanguard Chief Economist for the Americas.

“Stay focused, keep perspective, and, above all, don’t make
drastic changes to your portfolio,” they argue. “It’s important for investors
and for our clients to remember that volatility increases in every election,
particularly in years where there is a change of party in the presidency, and
sooner or later markets always go back to fundamentals. The U.S. economy in
particular has shown resilience compared to a much weaker global economic
environment. We are optimistic about the long term.”

Commentary published by Bob Doll, senior portfolio manager and chief equity
strategist at Nuveen Asset Management, highlights that a lack of clarity remains
paramount in any discussion of Donald Trump’s presidency when it comes to
financial markets.

“Regardless of people’s opinions about Hillary Clinton, her
economic policies are transparent and offered a measure of certainty,” he
writes. “Donald Trump’s statements have been vague and inconsistent. Financial
markets tend to prefer clarity, so we think equity markets would have preferred
a Clinton victory. We expect to see volatility rise, at least in the
short-term.”